What tax filing status for resident aliens who gave up Green Card but met substantial presence test - full year MFJ 1040 (subst. presence) or dual-status (green card)

[qxt70]

Clients, married couple, both green card holders and not US citizens, voluntarily gave up their green cards on 6/20/18, after which they departed for their home country with no intention of returning to the US. Filed MFJ 1040 for 2017. Based on substantial presence test formula, total number of days for past 3 years= 189. In 2018=106 days; 2017= 67 days (200/3); 2016= 16 (97/6). Number of days in US in 2019 = zero.  What are their filing status for 2018? Full-year MFJ as resident 1040 based on substantial presence test? Or dual-status based on green card test by filing resident MFJ 1040 for period up to 6/20/18 and MFS 1040NR for period after 6/20/18 to year end?

[TaxGuyBill]

The way I read it, their Residency Termination Date would be December 31st (resulting in a full year return) *UNLESS* you file the information for an earlier Residency Termination Date.
https://www.irs.gov/publications/p519#en_US_2018_publink1000222182

[qxt70]

Thanks TaxGuyBill. That's how I read it too. My clients qualify for earlier termination date, so will be using that approach.

[sjrcpa · Accepted solution]

Dual status.

[TaxMonkey]

Dual status - the would file a 1040-NR with a statement - could use the 1040 as a statement.

[qxt70]

Thanks, sjrcpa & TaxMonkey.